COVID-19 financial support for working seniors


Q. I am still working, and also receive Canada Pension Plan (CPP) and Old Age Security (OAS) benefits. If I get laid off from work, as it appears will happen soon, would I qualify for the government COVID-19 income? I am 69 years old.
–Tom

A. The Canadian government has unveiled massive financial support for workers and businesses in the wake of COVID-19. Working retirees are not excluded, Tom.

Canada Emergency Response Benefit (CERB)

The Canada Emergency Response Benefit (CERB) is meant for both employed and self-employed Canadian residents. It is payable to recipients who have involuntarily stopped or who will involuntarily stop working for at least 14 days consecutively.

For seniors, receiving Canada Pension Plan (CPP) or Old Age Security (OAS) benefits does not rule out receiving CERB.

The benefit is $500 per week and is currently payable for up to 16 weeks, payable in four-week periods. That is the equivalent of $26,000 annualized, payable for approximately four months. It is certainly possible the government could extend this benefit past the initial 16 weeks, but this remains to be seen.

If you are working part-time (or were, prior to being laid off), the caveat is you must have earned at least $5,000 in 2019, or over the previous 12 months at the time of applying, from employment, self-employment, or government maternity or paternity benefits.

The only age limit in place is for younger workers: you must be at least 15 years of age or older when you apply. So, at 69 years of age, Tom, there are no restrictions to you receiving the CERB if you do get laid off.

In order to continue to receive the CERB for the full duration, you must continue to be unemployed and not receive any salary, self-employment income, or parental benefits for the next four-week period for which you are applying.

The benefit is payable during the period of March 15 to Oct.3, meaning if you lose your job at any point up to Oct. 3, Tom, you can apply. Applications for retroactive payments will be accepted up to Dec. 2.

After the 16-week CERB period ends, you may still be eligible to apply for Employment Insurance (EI) or sickness benefits.

You can apply for CERB through Canada Revenue Agency (CRA) or Service Canada.

Employment Insurance (EI)

As the end of your CERB benefit period approaches, if you are still out of work, Tom, you can apply for Employment Insurance (EI) with Service Canada. It may be payable for up to an additional 45 weeks after the up to 16-week CERB benefit is paid—you cannot double-dip and receive both at the same time.

While on EI, you must complete biweekly reports to confirm you still qualify for EI. Generally, you must be ready, willing and capable of working, and have been available to work and actively looking for work.

The caveat, Tom, is that any earnings you have while receiving EI reduce your entitlement. OAS is not considered earnings, but CPP does impact your EI entitlement. EI benefits are a maximum of $573 per week, depending on your insurable earnings preceding your claim. The average CPP benefit is $735 per month and the maximum is $1,176—it is different for everyone.

CPP or other earnings while receiving EI regular benefits will reduce your EI by 50 cents for every dollar earned, up to 90% of the weekly insurable earnings used to calculate your benefits. Any earnings above this threshold will be deducted dollar for dollar from your EI entitlement.

As a result, you may be entitled to EI, Tom—but, depending on your CPP pension and job search after applying, your benefits may be impacted.

That said, there is no doubt you would qualify for the CERB in the interim if you are laid off, Tom.

Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.

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